HUNT VALLEY, Md.--(BUSINESS WIRE)--TESSCO Technologies Incorporated (NASDAQ: TESS), a consultative provider of the end-to-end wireless solutions to deploy network and connectivity systems, today reported financial results for its first quarter of fiscal 2017, ended June 26, 2016.

First-Quarter Highlights:

• Sequential revenue growth in all markets
• Continued challenges in public cellular, oil & gas and transportation
• Developing new successes from Internet of Things and Wi-Fi system solution offerings, and enterprise, industrial and government markets
• Net income of $0.1 million, or $0.01 per diluted share
• EBITDA* of $1.3 million or $0.16 per diluted share
• Continued strong balance sheet with no operational debt
• Quarterly dividend of $0.20 per share declared

“We delivered sequential improvement in revenue and earnings and maintained a strong balance sheet, despite a continued difficult environment,” said Robert Barnhill, Founder, Chairman and CEO. “While not yet reflected in the financial results, we are making progress evolving from a wireless public carrier-, transaction-centric product supplier, to a consultative provider of the end-to-end wireless solutions to deploy network and connectivity systems for private, as well as public, organizations.

“In addition to driving our transformations, the search for a new CEO is progressing well. We have met with a host of outstanding candidates and expect to name a new CEO this fiscal year.

“Going forward, we are aggressively transforming what we sell, and how we sell and do business digitally,” Barnhill said. “All of us at TESSCO are confident that we will regain our revenue and profit growth and improve shareowner value.”

*EBITDA, EBITDA per share, adjusted net income (loss) excluding charge related to non-recurring software licensing fees, and adjusted earnings (loss) per share (EPS) excluding charge related to non-recurring software licensing fees (also referred to in the chart above as “Adjusted EPS” as applicable only to Fourth Quarter FY 2016) are each Non-GAAP financial measures. Because the charge was applicable only to Fourth Quarter FY 2016, there was no adjustment to be made to EPS for First Quarter FY 2017 or First Quarter FY 2016, and “Adjusted EPS” and “EPS” in the chart above are equal for those periods. These Non-GAAP measures are indicated by an asterisk (*) in this press release, as a means to direct the reader to the discussion of Non-GAAP Information below and the reconciliation of Non-GAAP to GAAP results included as an exhibit to this press release.

For the fiscal 2017 first quarter, revenues totaled $128.9 million, compared with $134.7 million in the first quarter of fiscal 2016 and $114.2 million in the fourth quarter of fiscal 2016.

Gross profit was $27.1 million for the first quarter of fiscal 2017, compared with $29.0 million for the same quarter of fiscal 2016 and $23.0 million for the fourth quarter of fiscal 2016. The year-over-year decline in gross profit was primarily the result of reduced sales to our public carrier customers. Gross margin was 21.0% of revenue for the first quarter of fiscal 2017, compared with 21.5% for last year’s first quarter and 20.2% for the fourth quarter of fiscal 2016.

Selling, general and administrative (SG&A) expenses were $27.0 million for the first quarter of fiscal 2017. This compares with $26.1 million for the same quarter of the prior year and $26.2 million for the fourth quarter of fiscal 2016, including a $1.5 million charge taken in the fourth quarter of fiscal 2016 related to non-recurring software licensing fees1. The increase in SG&A expenses was primarily driven by increased compensation and recruiting expenses related to the Company’s sales and marketing initiatives.

Net income and earnings per diluted share were $0.1 million and $0.01 for the first quarter of fiscal 2017, compared with net income and earnings per diluted share of $1.7 million and $0.20 for the prior-year first quarter and net loss and loss per share of $(2.0 million) and $(0.24), respectively, for the fourth quarter of fiscal 2016. Excluding the impact of the $1.5 million software licensing charge1 taken in the fourth quarter of fiscal 2016, adjusted net loss and adjusted loss per share totaled $(1.1 million)* and $(0.13)*, respectively, for the fourth quarter of fiscal 2016.

Cash Dividend

TESSCO’s Board of Directors declared a quarterly cash dividend of $0.20 per common share payable on August 17, 2016 to holders of record on August 3, 2016. Any future declaration of dividends, and the establishment of record and payment dates, is subject to future determinations of the Board of Directors.

1Non-Recurring Software License Charge

During the fourth quarter of fiscal 2016, TESSCO received the results of a software license audit conducted by a major software provider. After significant negotiations, the Company settled the audit for $1.5 million, which was accrued in the fourth quarter and was paid in the first quarter of fiscal 2017. The ongoing annual cost from the results of this audit is minimal. The adjusted net income and adjusted earnings (loss) per share amounts included in this release, when excluding (for fourth quarter fiscal 2016 amounts) the $1.5 million charge related to the software licensing fees, are each non-GAAP measures and are presented here because we believe this charge to be infrequent and, therefore, not indicative of our operating performance.

Business Outlook

The Company is not providing earnings guidance at this time for fiscal 2017 due to the uncertainty that persists, primarily in the carrier market. While the Company expects both revenue and earnings to increase sequentially for the second quarter of fiscal 2017 compared with the first quarter of fiscal 2017, those results are expected to be lower than in the second quarter of fiscal 2016, primarily because of continued carrier market pressure, pricing pressure in the retail market and the ongoing investments in our transformations. TESSCO may provide financial guidance later in the fiscal year as visibility improves.

Forecasting future results is inherently difficult for any business, and actual results or trends may differ materially from those forecasted. The nature of the business is that TESSCO typically ships products within several days after booking orders. The lack of an order backlog makes it even more difficult to forecast future results. The Business Outlook published in this press release reflects only the Company’s current best estimate and it assumes no obligation to update the information contained in this press release, including the Business Outlook, at any time.

About TESSCO Technologies Incorporated (NASDAQ: TESS)

The convergence of wireless and the Internet is revolutionizing the way we live, work and play. New systems and applications are creating challenges and opportunities at an unprecedented rate.

TESSCO is there ? enabling organizations to capitalize on the opportunities in wireless by providing Your Total Source®of end-to-end solutions. TESSCO delivers the knowledge and product and supply chain solutions required to build, use and maintain wireless voice, data, video, connectivity and control network systems.